SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
Litigation Release No. 16050 / February 2, 1999
SEC v. FLOYD LELAND OGLE, DONALD TABOR, KAILEY MINING CO., REUBEN
PETERS, PETERS SECURITIES CO., LP, ALBINAS KURKULIS, ANDREW
KURKULIS, PAUL KURKULIS, GARY COTTEN, AND ROBIN OPP, Civil Action
No. 99 C 609 (U.S. District Court for the Northern District of
Illinois, Eastern Division)
SEC BRINGS CROSS-BORDER MICROCAP FRAUD CHARGES AGAINST FORMER
PRESIDENT OF EXSORBET INDUSTRIES, MANAGING PARTNER OF PETERS
SECURITIES, AND CANADIAN-BASED KAILEY MINING COMPANY
The Securities and Exchange Commission, in continuing its
effort to crackdown on cross-border microcap fraud, late
yesterday charged Floyd Leland Ogle, the former president of
Exsorbet Industries, Inc. of Arkansas, Reuben Peters and his
firm, Peters Securities Co., LP of Chicago, Illinois, the market
maker for Exsorbet stock, and Ogleís Canadian partner, Donald
Tabor and his Canadian company, Kailey Mining Co., with
manipulating Exsorbetís stock from 1993 to 1996.
The SECís complaint, filed in U.S. District Court in
Chicago, seeks permanent injunctive relief, accountings,
disgorgement of ill-gotten gains, pre-judgment interest, civil
money penalties, and officer and director bars based upon
numerous violations of the antifraud and registration provisions
of the federal securities laws.
Exsorbet Industries, currently named Consolidated Eco-
Systems, Inc., produced a peat moss oil absorbent product which
was purportedly useful in environmental cleanup and remediation
services. The SECís complaint alleges that the defendants pushed
the price of Exsorbet stock from $1 to $13 a share by giving or
receiving bribes for participation in the manipulation,
controlling the floating supply of Exsorbet stock, artificially
fixing the opening price at $5 on the first day of public trading
on February 4, 1994, and dominating and controlling the secondary
market in the stock. The SEC also alleges extensive cross-border
manipulation of Exsorbetís stock by Ogle friend and business
partner Donald Tabor of Kelowna, British Columbia, Canada and
Taborís company, Kailey Mining Co., including wash sales and
matched trades, through four Canadian broker-dealers. The
complaint further alleges that Ogle and Cotten issued a forged
Environmental Protection Agency endorsement letter of Exsorbetís
oil absorbent product, and issued a false press release stating
that Exsorbet had obtained $5 million in contracts.
Floyd Leland Ogle was convicted in Canada in 1987 for
criminal conspiracy to manipulate the stock of a Canadian
company, for possession of stolen property, and for obstruction
of justice. The other defendants named in the SECís lawsuit were
Chicago stockbrokers Albinas Kurkulis, Andrew Kurkulis, and Paul
Kurkulis, former San Diego stockbroker Robin Opp, and former
Exsorbet executive vice president Gary Cotten of Muskogee,
Oklahoma. Cotten is currently under federal indictment in New
York City for securities fraud related to the bribery of
stockbrokers. The Commission is seeking to enjoin the defendants
based on violations of Sections 5 and 17(a) of the Securities Act
of 1933 and Sections 10(b) and 15(c)(1) of the Securities
Exchange Act of 1934, and Rules 10b-5, 10b-6, and 15c1-2
thereunder.
Exsorbet stock, stock symbol "EXSO," started trading in the
National Quotation Bureau Pink Sheets on February 4, 1994, moved
to the Over-the-Counter Bulletin Board on March 9, 1994, and
became listed on the NASDAQ Small Cap Market on November 27,
1995. At its peak on September 22, 1995, Exsorbetís market
capitalization was $105.5 million. Because Exsorbet stock traded
in these markets and was thinly capitalized, it is considered a
"Microcap" stock. This Enforcement action is part of the SECís
four-pronged approach to minimizing Microcap fraud: enforcement,
inspections, investor education, and regulation. For more
information about the SECís response to Microcap fraud, visit the
SECís Microcap Fraud Information Center at
http://www.sec.gov/news/extra/microcap.htm.